5 Important Tips For Preventing Employee Embezzlement
“But where has all the rum gone?” That might be what you would ask if you were Captin Jack Sparrow, and you thought one of your pirates was stealing from you.
What happens if you run your own business? Or you’re management for a company? Stealing can happen to any company, but statistics prove it is most common in smaller ones.
Here are five ways you can be on the lookout to prevent employee embezzlement from happening at your company.
Employee Embezzlement Isn’t From Who You Expect
Everyone has the image of a stockbroker on Wall Street, playing slick games, and stealing from his employer. It isn’t always who you expect though.
Employees can be perfectly normal people working for small organizations, such as a bookkeeper who embezzled nearly four decades.
Follow these guidelines, when trying to learn more about employee embezzlement, and how to detect it.
Pay Attention If You Work in Finances
Financial institutions should watch employees carefully if they suspect them of embezzling. Having easy access to cash, or the ability to draw off a company account can prove to be easy for certain individuals.
Signs of employees that embezzle include the following traits:
- Have more expensive items than their salary would allow them to have (such as owning a Corvette, on a salary of $40,000 a year)
- Individuals do not want you to intrude on their work, or do not want others to take over their work. This is a sign of covering something up.
- Missing records of work. This could include everything from balance sheets to ledgers, depending on what kind of environment the employee works in.
Involve Two or More Individuals in Transactions
One way to prevent employee embezzlement is to have more than one worker involved in financial transactions.
You should have one employee in charge of setting up payroll. A separate employee should be in charge of processing payments.
This prevents the same employee from taking advantage of the payroll system and using it to their benefit.
Check Credit Before Hiring
If your company deals with information that is sensitive in nature, have credit checked for your employees to prevent problems.
Credit does not determine everything, but it can be eye-opening. You might gain insight if a potential employee has:
- Been involved in fraud
- Have several delinquent accounts
- Has gone to court over money owed
You can learn more about how credit scores provide information about a person’s financial history.
Have a Lawyer on Retainer
Keeping a lawyer on retainer can prove helpful, should you run into financial issues. Your lawyer can advise you on your rights as a business owner, and how to handle someone stealing.
You can also get help from other professionals when you need to investigate. There are specialized teams that can help with certain cases, such as forensic accounting and fraud investigation.
By having them on your side, you can make the best decision for your business and yourself.
Have Regular Audits
By auditing your business on a regular basis, finding missing money will be noticeable.
Employees will know that you carefully check, and will be less tempted to be involved in stealing. It can provide a system of checks and balances, which is important for any company.
Get Started Today
If you want to prevent stealing from employees, now is the time to put a plan in place. By taking the steps now, you will have less of a headache later on, and avoid bad employees.
Prevention is key in order to keep issues from happening, especially where employee embezzlement is concerned.
If you would like to learn more about other best practices for your business, check out our blog.
